Mccorkle Investigation Unjustified, Bailey Says

F. Lee Bailey Said William J. Mccorkle Was Making Refunds To Clients When The Irs And Fbi Stepped In.

October 1, 1998|By Jim Leusner of The Sentinel Staff

Defense lawyer F. Lee Bailey questioned on Wednesday why a state official sought a criminal investigation of infomercial star William J. McCorkle at the time he was making hundreds of refunds to unhappy customers.

Bailey complained that he was working on behalf of McCorkle to settle civil litigation started by the Florida Attorney General's Office when the official contacted the Internal Revenue Service.

The federal agency later seized assets of McCorkle and his companies that sold packages on making big money in real estate. The raid in May 1997 eventually shut down McCorkle's operation.

``Mr. Bailey, I have heard you say that the best defense to a fraud investigation is to make liberal refunds,'' Assistant Florida Attorney General Lisa Young testified during McCorkle's trial in federal court. ``... In a fraud investigation, refunds are essential to a defense.''

Bailey asked Young to produce a letter, memo or document showing he made such a statement.

After a lunch recess, she returned with an excerpt of a book by Bailey on trial tactics.

In a chapter entitled ``Defending Business and White Collar Crime,'' the defender of well-known clients ranging from Sam Sheppard to O.J. Simpson wrote that making refunds ``negates'' fraud in cases of wild exaggerations and distorted claims by defendants.

Bailey countered that the excerpt dealt only with defendants who intentionally committed fraud.

He has argued that while McCorkle's companies underwent explosive growth in 1996 - grossing $27 million - he became embroiled in a state consumer-affairs probe that ended up improperly in the hands of the IRS, FBI and postal inspectors.

McCorkle, his wife, Chantal, three associates and 10 McCorkle companies are on trial, charged with fraud and money laundering.

Young contended that McCorkle and his Cashflow System Inc. did not start making refunds until her agency subpoenaed records in August 1996 and sought a court order against the company based on 200 consumer complaints.

For months, Bailey said, he tried to negotiate with Young to work out differences with the state, answering Young's questions about the business. Bailey said the two and their associates had several lunch meetings, and he even attended Young's 1996 Christmas party, where he dropped off records.

Young said she got nothing but vague or ``self-serving'' records while McCorkle continued to air infomercials and secretly hid $7.1million in the Cayman Islands.

Bailey concluded his questioning by alleging that attorney general's investigator Michael Wenger once said that he hated McCorkle because he was successful.

Bailey also alleged that Young had made disparaging remarks about his client, saying that ``McCorkle was gay, and his wife was unfaithful.''